Making markets with mobiles

During a recent visit to Delhi to attend the Manthan Awards ceremony, I was struck by the amount of energy and expectation in the information and communication technology (ICT) industry focused on the rural market. Reaching this group via a buying-selling market on the mobile phone is a core part of my company CellBazaar’s strategy and vision. In Delhi, we found that vision shared by many others—from mobile pay solutions to rural cyber cafés to complex database engines.

Photograph: Harikrishna Katragadda / Mint

While the rural market is our focus and one reason why Indian companies have shown interest in the CellBazaar story in Bangladesh, it is important to focus on the realm of the possible. I find it worrying when presentations end with idealized images of a farmer, alone and unaided, accessing the pleasures of ICT data. The reality is that there is a last-mile solution needed to bring mobile or computer-based ICT to farmers—and that involves a human translation and aiding factor.

CellBazaar was designed at MIT Media Lab and launched in Bangladesh with the promise of streamlining the supply chain in villages. In developing countries, limited communication technology hinders business. Travelling great distances is the only way to get market information. Isolated and uninformed, farmers, traders and businesses have no bargaining power with middlemen. CellBazaar was devised to solve this problem and launched on four platforms—SMS, WAP, the web and IVR—that all connect to one customer-generated marketplace. Using these platforms, everyone gathers market information to make smart business decisions. Those lacking capital for brick and mortar can set up shop on the mobile. Micromarket makers emerge and the market eventually converges toward efficient prices.

CellBazaar users have begun to have some success in bypassing rural middlemen—those who take a lion’s share of profits and hold agricultural sellers hostage to lack of information. At the same time, we have generated a new set of micro-enablers around the CellBazaar service. These are micro-entrepreneurs in rural areas, especially in cyber cafés or small stores, whom we taught the basics of using CellBazaar. They then offer farmers the service of posting their sale items. In exchange for translating the farmer’s product description from Bengali to English, custom-editing it for a small-screen mobile and helping complete the transaction, this micro-enabler takes a small fee. Whatever that fee, it is far smaller than what middlemen demand. In this fashion, the micro-enabler is a stepping stone to overcome the key challenge with rural sellers—English literacy.

In Bangladesh, city populations were early adopters of the service. However, it is the rural population that CellBazaar spends significant energy and resources educating—because this is the group to whom a mobile marketplace can represent a quantum leap in opportunity. In rural markets, we often find ourselves taking on the roles that should normally be that of state agencies, educators and NGOs.

Beyond dialling and storing numbers, many people do not explore the majority of their phone functions. A device with computing power equal to a 1969 National Aeronautics and Space Administration computer is in people’s pockets, but it is severely under-utilized. Before teaching users how to use CellBazaar, we are teaching them the basic tools of mobile technology.

By learning all these functions, consumers easily pick up new features as they are added to mobile phones. In the future, as all mobile phones are transformed into full-fledged computers (e.g., iPhone), CellBazaar user will be trained and ready to do anything with mobile devices. We foresee that each “super” user of CellBazaar will in the future be able to start their own digital-based commodity training hub—one can consider this similar to the manner in which the first batch of Korea-trained Bangladeshi garments workers went on to start their own factories within a couple of years.

In thinking of the Bangladeshi garments industry, we started thinking of our work as laying the groundwork for ourselves and everyone else. Although we were teaching mobile computing in order to access CellBazaar, the trained consumer can use any new application on the mobile. With this realization, we are also in partnerships with institutions which are interested in training the masses in technology in order to develop national human resources infrastructure. We are eager to move to the next stage, which will be more extended public-private partnerships that help the concept grow and reach millions of additional users.

Thus, the reader can understand my slight discomfort with idealistic visions of a farmer instantly accessing all the wonders of ICT. This vision is indeed possible, but it is not an instant solution. Rather, a lot of grass roots-level hard work and public-private partnerships for technology education are essential. The role of micro-enablers is key, as they can spread the service through word of mouth, motivated by their own small profit potential.

In Bangladesh’s context, the adoption curve in rural markets has been far slower than urban centres, but we remain committed to continuing to target this sector, as this is where the incremental benefits to consumers through mobile-based commerce is far greater. In developing countries, telephone operators need to start considering their consumers as producers. Buying and selling (trading) on the mobile is one way the consumers become a profitable sector for phone operators. It is a win-win solution, and the rural sector is where such opportunity remains untapped.

Kamal Quadir is founder of CellBazaar (Cellbazaar.com), which received the 2008 Manthan Award for Best E-Content for Development. Your comments are welcome at theirview@livemint.com